US Stocks Fall
US stocks took a hit, and the dollar surged in thin trading during the holidays, as investors prepared for another interest rate hike from the Federal Reserve. This came after Friday’s US job data, with the S&P 500 (SPI:SP500) falling more than 0.5%, and the tech-heavy Nasdaq 100 index (NASDAQI:NDX) losing 1.1%. Yields for the two-year Treasury lingered around 4%. The news caused tech stocks to drop due to the possibility of a rate hike, and Apple’s (NASDAQ:AAPL) report on the significant fall in PC shipments exacerbated the sector slide. Meanwhile, Tesla Inc. (NASDAQ:TSLA) saw a drop after reducing prices for the second time this year.
SPAC-IPO Companies Hit With Goodwill Write-Downs
Companies that went public by merging with special purpose acquisition companies (SPACs) in recent years have been hit with billions of dollars in goodwill write-downs in 2022, partly due to the premiums paid to secure deals during the SPAC boom. Financial and risk advisory firm Kroll LLC reported that some of the most significant impairments were from cryptocurrency platform Bakkt Holdings Inc. (NYSE:NKKT), business-services provider Advantage Solutions Inc. (NASDAQ:ADV), 3D printing firm Fathom Digital Manufacturing Corp. (NYSE:FATH), self-driving vehicle startup Aurora Innovation Inc. (NASDAQ:AUR), and the now-bankrupt bitcoin miner Core Scientific Inc (OTC:CORZQ). All five companies had pre-tax impairments that exceeded $1 billion last year.
Record ST Bonds Sold by Japanese Companies
Record amounts of short-term bonds are being sold by Japanese companies, indicating that they are preparing for the likelihood that the central bank will dismantle its ultra-low interest rate policy. Issuance of yen corporate notes due in five years or less reached an unprecedented 7.4 trillion yen ($56 billion) in the fiscal year that ended on March 31, according to data compiled by Bloomberg. Sales of Japanese debt maturing in longer than five years during the same period fell to 5.4 trillion yen, the least since fiscal 2015.
Cloud Spending Outlook Strong
One analyst from Wedbush said that Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOG) are all likely to deliver strong cloud results in their upcoming earnings, as cloud spending across businesses has stabilized. Microsoft Azure, Amazon Web Services, and Google Cloud Platform are the major cloud businesses for the respective companies. The Wedbush analyst expects that Microsoft, Amazon, and Alphabet will meet or exceed Wall Street expectations with their cloud results in their next earnings report.
SenseTime Launches SenseNova
SenseTime, a Chinese AI startup, has launched SenseNova, a generative AI model that draws on vast data and is accessible to users through a chatbot called SenseChat. The debutant model was unveiled to compete with ChatGPT, an American AI model developed by OpenAI. SenseNova’s code-writing abilities and story-inventing skills were demonstrated at the launch, where it was prompted to invent a children’s story about a cat catching a fish. This launch follows similar launches by Chinese tech giants Alibaba and Baidu.
PC Shipments Continue To Fall
In the first quarter, personal computer shipments by all PC makers combined fell 29% to 56.9 million units, with Apple Inc.’s (NASDAQ:AAPL) personal computer shipments declining by 40.5%. Lenovo Group Ltd (HKG:0992) and Dell Technologies Inc. (NYSE:DELL) registered drops of more than 30%, while HP Inc. (NYSE:HP) was down 24.2%. Asustek Computer Inc. (TPE:2357) rounded out the top 5 with a 30.3% fall. The fall in shipments comes as PC makers continue to grapple with a glut of unsold inventory. The demand surge driven by pandemic-era remote work has evaporated, according to IDC’s latest report.
Samsung Cuts Memory Chip Production
Shares of rival manufacturers such as Micron Technology Inc. (NASDAQ:MU) and Western Digital Corp. (NASDAQ:WDC) rose almost 7% and 8%, respectively, after Samsung Electronics Co. (KRX:005930) pledged to cut memory chip production to ease a supply glut that’s hammered prices across the industry. Samsung announced the move after reporting its smallest profit in more than a decade.
Super Mario Bros. Movie Breaks Records
“The Super Mario Bros. Movie,” a collaboration between Illumination, Nintendo (TYO:7974), and Universal (NYSE:UVV), had a blockbuster opening weekend, racking up $146 million over three days and pushing its five-day tally to $377 million, the biggest opening weekend ever for an animated title globally. Box-office figures aren’t adjusted for inflation. The animated movie arrived in theaters Wednesday and took in $204 million domestically over its first five days, adding $173 million internationally, according to studio estimates Sunday.
Tesla Lowers Prices Again
Tesla Inc. (NASDAQ:TSLA) has lowered the prices of its vehicles in the U.S. again, with the EV maker cutting the prices of its Model S and Model X vehicles by $5,000 each to $84,990 and $94,990 for the base models, respectively. The company also lowered the price on its Model 3 sedan and some Model Y crossovers, as it tries to stoke demand amid heightened competition from other auto makers. Tesla delivered a record 422,875 vehicles to customers globally in the first quarter, up 36% from a year earlier. Rival auto makers, such as Ford Motor Co. (NYSE:F), have also cut prices; Ford said it would lose about $3 billion on its EV business this year.
Exxon Mobil Abandons Offshore Brazil
Exxon Mobil Corp. (NYSE:XOM) has abandoned its multibillion-dollar wager on finding oil in the deep waters off Brazil after a series of disappointing wells left it with nothing to show for more than five years of work. The Texas oil giant has shifted geologists and engineers from working on the offshore acreage it began snapping up with partners for $4 billion in 2017 to other countries, including Guyana, Angola, and Canada. Exxon hasn’t put out tenders to drilling contractors for exploratory work there in the year since its last active rig contract expired in April 2022, analysts said, and it skipped Brazil’s latest offshore auction in December.
Apple Unveils First Indian Store
Apple (NASDAQ:AAPL) has unveiled its first retail store in India, which is set to open this month. This move signals India’s growing importance for the California-based company. Previously, Apple has sold its products in India through resellers, e-commerce websites, and large format retail chains. With the opening of its own brick-and-mortar store, Apple is adding another critical layer to its wide distribution. In February, CEO Tim Cook called India a major focus for Apple and said the company was putting a lot of emphasis on the market. Although Apple did not give a specific figure, it announced record iPhone revenue in India in the December quarter.
Marketers Stand Firm on Metaverse
Despite some of the metaverse’s biggest proponents scaling back or shutting down spending on virtual worlds, many marketers are standing firm. According to a survey of 903 executives conducted by research firm Forrester in January and February, 46% of consumer brand marketers say they will increase their metaverse budgets this year, while only 12% say they will spend less. Mastercard Inc. (NYSE:MA) plans to fund more branded metaverse experiences after hosting a virtual Grammy Awards red carpet on popular online game platform Roblox (NYSE:RBLX) and creating a plaza for Pride Month in the 3-D virtual world Decentraland, said Chief Marketing and Communications Officer Raja Rajamannar.
Tupperware Discloses Going-Concern Warning
Shares of Tupperware (NYSE:TUP) fell sharply after the company disclosed a going-concern warning, saying it was working with financial advisors to improve its capital structure and better position the business. Tupperware, which makes food-storage containers, has been struggling recently. The warning follows a securities filing from last month, which said that some recent “financial statements should be restated and no longer relied upon.”
Block Faces Challenges Beyond Short-Seller Report
Payments group Block (NYSE:SQ) is facing several challenges beyond the short-seller report that battered its shares last month, according to an analyst report. Keefe, Bruyette, and Woods analysts led by Steven Kwok said that “many small risks are starting to add up” for the company. Rising competition in acquiring and potential regulatory scrutiny in Cash App are among the primary concerns. They downgraded the stock to Market Perform from Outperform and slashed their target for the price to $75 from $90.